3.6 Strategies to Save

Instructions

OBJECTIVES & STANDARDS
Math Objectives
Write a linear equation in slope-intercept form from a word problem
Solve a linear equation from a word problem
Common Core Math Standards
Link to all CCSS Math
CCSS.PRACTICE.MP4
CCSS.HSF.BF.A.1
CCSS.7.RP.A.3
Personal Finance Objectives
Learn the advantages of pay yourself first, the 50/30/20 Rule, and other strategies to help meet savings goals
Realize that saving can be difficult when income is too small to cover necessities
National Standards for Personal Financial Education
Saving
9d: Explain how the saving strategy “pay yourself first” can help people achieve their saving goals
DISTRIBUTION & PLANNING
Distribute to students
Student Activity Packet

CALCULATE: Savings Goals
Let’s say you set a savings goal of $50 per month.

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How much will you have saved at the end of 4 months? $_______ 

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How much will you have at the end of 2 years?$_______ 

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You dream of owning a PS5, multiple controllers, a small collection of games, and a few other accessories. When you put it all in your online cart, the bill comes to $1225. How long will it take you to save enough to afford the whole purchase?_______ months

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If, instead, you had the target of buying the gaming bundle in 7 months, how much would you need to save per month instead to meet your goal?_______ a month

EDPUZZLE: Pay Yourself First
In the intro, we assumed you’d be able to save $50/month. But what strategies can you use to actually save that money? First and foremost, you should consider “paying yourself first.”  Watch this video to learn more about the benefits of making your savings automatic. Then, answer the questions either in EdPuzzle or below.

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GRAPH: The 50/30/20 Budget Rule
Another strategy that helps quantify and encourage savings is the 50/30/20 method for budgeting, where 20% should go to saving and debt repayment.

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First, picture yourself as a 25-year-old, living your best life. What types of items would future-you put in each of these three categories for the 50/30/20 Rule?

Now, use this pie chart as a reference to answer the questions:

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If my after-tax income is $2000/month, how much would I put into each category?
Needs (50%)=_______ 
Wants(30%)=_______ 
Savings(20%)=_______ 

6

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The average household in the US takes home $4,362 per month. Assume that the household follows the 50/30/20 rule, then splits their savings portion equally towards paying down student debt and saving for a house. How much would go toward saving for a house?_______ 

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How long will it take them to save $30,000 for a home down payment?_______ months

INTERACTIVE: Income + Financial Stability in America
50% toward needs, 30% toward wants, 20% toward saving and debt repayment. That sounds easy, right? Anyone can pull that off, right? Here are a few examples of hypothetical but realistic families that would struggle with this strategy. Scroll through the interactive, reading as you go along, and then select one pathway in the “Take a look at a typical American” section and learn “How does this add up?”

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Which household did you choose?

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ACTIVITY: How to Save Money: 22 Proven Ways
In order to reach your savings goals, you need an achievable target and a plan for how to get there. 22 strategies are far too many for anyone to keep track of, so open this article and use the QUICK LINKS at the top to investigate THREE strategies from the list. Your teacher may have you work individually or in a group to complete the table below.

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Strategy:_______ 
Summarize the strategy in 1-2 sentences_______ 
Why does this strategy work?_______ 
What type of spender/saver would this strategy work well for?_______ 

4

Strategy:_______ 
Summarize the strategy in 1-2 sentences_______ 
Why does this strategy work?_______ 
What type of spender/saver would this strategy work well for?_______ 

4

1

For each scenario, write a linear equation to model what’s happening, and then solve the equation to answer the question.

2

Melody has $50 in her savings account right now. She wants to save $250 for a Taylor Swift concert ticket. She figures she can save $20/week from her part-time job.
Write an equation to model her savings account balance after x weeks._______ 
b.  How long will it take to be able to afford the ticket?_______weeks 

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After a really rough winter, Kristoff can’t afford to fix his sled until he has $7000 saved. Every month, his take-home pay is $2500, and he uses the 50/30/20 rule to determine how much he’ll spend and save.
A.  Write an equation to model Kristof’s savings after x months._______ 
b.  How long will it be before he can get his sled fixed if he’s already got $900 in the bank?_______months

2

4

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What do “paying yourself first” and “automating your savings” have in common?
They both require you to use online or mobile banking
They both focus on making sure you can afford necessities like housing and transportation
They both prioritize saving money before you have the opportunity to spend your entire paycheck
They both require you to make a middle class income before you become eligible to use them as your saving strategy

1

The 50/30/20 Rule suggests that you budget your money into___
50% savings, 30% needs, 20% wants
50% needs, 30% wants, 20% savings
50% needs, 30% debt repayment, 20% savings
50% wants, 30% savings, 20% needs

1

Most savings strategies focus on these two actions:
Spend less money and make saving a higher priority in your budget
Spend less money and change where you do your banking
Earn more income and donate more to charity
Keep a tight budget and eliminate fun temporarily

3.6 Strategies to Save

First, picture yourself as a 25-year-old, living your best life. What types of items would future-you put in each of these three categories for the 50/30/20 Rule?

Which household did you choose?

The 50/30/20 Rule suggests that you budget your money into___
50% savings, 30% needs, 20% wants
50% needs, 30% wants, 20% savings
50% needs, 30% debt repayment, 20% savings
50% wants, 30% savings, 20% needs

Most savings strategies focus on these two actions:
Spend less money and make saving a higher priority in your budget
Spend less money and change where you do your banking
Earn more income and donate more to charity
Keep a tight budget and eliminate fun temporarily

What does it mean to "pay yourself first"?
Deposit money into your savings account before spending on anything else.
Purchase an item you want before something you need.
Pay all of your mandatory expenses before paying for optional expenses.
Obtain an additional job to supplement your income.

First, picture yourself as a 25-year-old, living your best life. What types of items would future-you put in each of these three categories for the 50/30/20 Rule?

Which household did you choose?

What would you recommend for a household that cannot make this 50/30/20 method work?

Which of the three strategies you just researched do you think would work best for you, personally? Explain why.

The 50/30/20 Rule suggests that you budget your money into___
50% savings, 30% needs, 20% wants
50% needs, 30% wants, 20% savings
50% needs, 30% debt repayment, 20% savings
50% wants, 30% savings, 20% needs

Most savings strategies focus on these two actions:
Spend less money and make saving a higher priority in your budget
Spend less money and change where you do your banking
Earn more income and donate more to charity
Keep a tight budget and eliminate fun temporarily

What does it mean to "pay yourself first"?
Deposit money into your savings account before spending on anything else.
Purchase an item you want before something you need.
Pay all of your mandatory expenses before paying for optional expenses.
Obtain an additional job to supplement your income.

What would you recommend for a household that cannot make this 50/30/20 method work?

Which of the three strategies you just researched do you think would work best for you, personally? Explain why.

3.6 Strategies to Save

3.6 Strategies to Save

First, picture yourself as a 25-year-old, living your best life. What types of items would future-you put in each of these three categories for the 50/30/20 Rule?

Which household did you choose?

The 50/30/20 Rule suggests that you budget your money into___50% savings, 30% needs, 20% wants50% needs, 30% wants, 20% savings50% needs, 30% debt repayment, 20% savings50% wants, 30% savings, 20% needs

Most savings strategies focus on these two actions:Spend less money and make saving a higher priority in your budgetSpend less money and change where you do your bankingEarn more income and donate more to charityKeep a tight budget and eliminate fun temporarily

What does it mean to "pay yourself first"?Deposit money into your savings account before spending on anything else.Purchase an item you want before something you need.Pay all of your mandatory expenses before paying for optional expenses.Obtain an additional job to supplement your income.

First, picture yourself as a 25-year-old, living your best life. What types of items would future-you put in each of these three categories for the 50/30/20 Rule?

Which household did you choose?

What would you recommend for a household that cannot make this 50/30/20 method work?

Which of the three strategies you just researched do you think would work best for you, personally? Explain why.

The 50/30/20 Rule suggests that you budget your money into___50% savings, 30% needs, 20% wants50% needs, 30% wants, 20% savings50% needs, 30% debt repayment, 20% savings50% wants, 30% savings, 20% needs

Most savings strategies focus on these two actions:Spend less money and make saving a higher priority in your budgetSpend less money and change where you do your bankingEarn more income and donate more to charityKeep a tight budget and eliminate fun temporarily

What does it mean to "pay yourself first"?Deposit money into your savings account before spending on anything else.Purchase an item you want before something you need.Pay all of your mandatory expenses before paying for optional expenses.Obtain an additional job to supplement your income.

What would you recommend for a household that cannot make this 50/30/20 method work?

Which of the three strategies you just researched do you think would work best for you, personally? Explain why.

The 50/30/20 Rule suggests that you budget your money into___
50% savings, 30% needs, 20% wants
50% needs, 30% wants, 20% savings
50% needs, 30% debt repayment, 20% savings
50% wants, 30% savings, 20% needs

Most savings strategies focus on these two actions:
Spend less money and make saving a higher priority in your budget
Spend less money and change where you do your banking
Earn more income and donate more to charity
Keep a tight budget and eliminate fun temporarily

What does it mean to "pay yourself first"?
Deposit money into your savings account before spending on anything else.
Purchase an item you want before something you need.
Pay all of your mandatory expenses before paying for optional expenses.
Obtain an additional job to supplement your income.

The 50/30/20 Rule suggests that you budget your money into___
50% savings, 30% needs, 20% wants
50% needs, 30% wants, 20% savings
50% needs, 30% debt repayment, 20% savings
50% wants, 30% savings, 20% needs

Most savings strategies focus on these two actions:
Spend less money and make saving a higher priority in your budget
Spend less money and change where you do your banking
Earn more income and donate more to charity
Keep a tight budget and eliminate fun temporarily

What does it mean to "pay yourself first"?
Deposit money into your savings account before spending on anything else.
Purchase an item you want before something you need.
Pay all of your mandatory expenses before paying for optional expenses.
Obtain an additional job to supplement your income.